Patisserie Holdings finance chief arrested and bailed

Patisserie Holdings finance director Chris Marsh has been arrested, according to the crisis-hit business.

In a statement issued to the Stock Exchange this morning, Patisserie Holdings reported: “The company has been made aware that Chris Marsh, who is currently suspended from his role as company finance director, was arrested by the police last night and has been released on bail.”

The announcement follows reports of serious accounting irregularities and came just hours after the business said it will not be able to trade in its current form unless it gets a capital injection.

“The board has reached the conclusion that there is a material shortfall between the reported financial status and the current financial status of the business,” it stated yesterday. “Without an immediate injection of capital, the directors are of the view that there is no scope for the business to continue trading in its current form.”

Trading in the business’ shares on AIM have also been halted since Tuesday.

Patisserie Holdings

  • Total number of sites: 206 *
  • Brands: Patisserie Valerie (153 sites), Philpotts (22), Druckers (20), Baker and Spice (4), Flour Power City Bakery (1)
  • Employees: 3,200
  • Food/drink split (2017): 57/43
  • Eat in/takeaway split (2017): 65/35
  • Turnover: £60.5m (six months to 31 March 2018)
  • EBITDA: £13.6m (six months to 31 March 2018)
  • HQ location: Birmingham
  • Key management: Paul May, CEO; Luke Johnson, chairman

Patisserie Holdings has a vertical supply chain, producing goods in-house at seven bakeries and delivering them to stores. Products are also sold online.

Since acquiring the Patisserie Valerie business in 2006, the business has expanded rapidly through acquisitions and openings to more than 200 sites. In its current financial year, the business has been aiming to open 20 stores.

Timeline

  • 1926: First Patisserie Valerie café opened in Frith Street in London’s Soho by Madame Valerie to introduce Continental-style patisserie to the English
  • 1939-1945: Café destroyed by bombing in Second World War, and Madame Valerie opens new Patisserie Valerie on nearby Old Compton Street
  • 1945-2005: Patisserie Valerie grows to eight sites in central London
  • 2006: Luke Johnson’s private equity firm Risk Capital Partners backs acquisition of Patisserie Valerie by Patisserie Holdings
  • 2007: Acquires Druckers – Vienna Patisserie
  • 2009: Acquires Baker & Spice, which operates sites in London and Oxford
  • 2013: Acquires London-based organic bakery Flour Power City Bakery
  • 2014: Acquires the Philpotts food supply and café chain
  • 2014: Patisserie Holdings listed on Alternative Investment Market
  • 2016: Annual sales exceed £100m for the first time
  • 2017: Launches trial partnership with Sainsbury’s, selling branded products on 12 supermarket counters. Partnership is a success and has since been expanded to 70 stores.

2018

  • 10 October (AM): Share trading suspended as company launches investigation into serious accounting irregularities. Chief financial officer Chris Marsh suspended.
  • 10 October (PM): Winding-up petition filed at the High Court relating to £1.14m owed to HMRC by Stonebeach Limited, the company's principal trading subsidiary.
  • 11 October: Patisserie Holdings reports it cannot continue to trade in its current form without immediate cash injection.
  • 12 October: Chris Marsh arrested by police and released on bail.

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